<<I wasn't referring to you and CC but the conspiracy boys who have picked on the smallest contribution to gold supplies (CB sales) and made the biggest fuss about it.>>
I think that nobody really believe that official sales have affected the gold prices in a big way...(except maybe for the recent BOE announcement which was done in an exceptional manner). After all, as Bob said, average offical sales have been rather small over the years.
The problem is more the gold that is borrowed from the CB's, on behalf of the producers that hedge forwards or the "gold carry" traders, and sold on the market. Here the speculations are that as much as 10,000-14,000 tons could have been sold that way.
The big problem is that, in theory, the forward game is a zero-sum game as the gold that is hedged and sold, is therefore removed from the market at the time of delivery.
Let say hypothetical miner X borrowed and sold forward 100 tons for delivery 3 years down the road, some 3 years ago. Miner X must now deliver back this 100 tons to the lender and not to the market.
In practice, we don't know the time schedules agreed upon in the various sales contracts between the miners and the BB's. The different producers have different agendas ..and over all, their borrowing, selling and delivering should balance out and have little effect on the gold price.
I find it hard to believe that gold dropped only to $250 after 10,000-14,000 tons have been dumped on the market. Make no sense. But I find it more realistic to say that gold dropped to $250 because of a combination of excessive (more than 3X normal) scrap gold supplies and a few other smaller events (Australian sales in 98, BOE in MAY, Barrick premium program..maybe?, some gold carry trades).
There are most probably some manipulations in this market... but a conspiracy ???
Time will tell where the truth is. |
